Also: Windows 8 for games, final Office will be an upgrade to Windows RT

Just as the world is coming to grips with the post-PC era the CEO of PC software behemoth Microsoft, Steve Ballmer, seems to be trying to prolong the age by redefining the iconic business machine to include tablets.

In a Seattle Times interview with Janet I. Tu, Ballmer says PCs will sell well next year, but he acknowledges that some of what might be called tablets could also be considered PCs.

This includes Microsoft's own new hardware device Surface for Windows 8, which has all the features of a tablet but also includes a fold-down cover that becomes a keyboard. That hardware arrangement, when coupled with the version of Windows 8 for x86 processors that supports all traditional Windows applications, is a laptop PC.

Another version, called Windows RT, supports only modern applications, the name Microsoft has given to apps designed for touch. Windows RT could legitimately be considered a tablet with a keyboard.

Here's what Ballmer said to Tu:

Q: What is Microsoft's plan if Windows 8 doesn't take off?

A: You know, Windows 8 is going to do great.

Q: No doubt at all?

A: I'm not paid to have doubts. (Laughs.) I don't have any. It's a fantastic product. ...

People talk about: "How healthy is the PC market?" There's going to be close to 400 million PCs sold in the next year, which makes it a big market. And whether it's 405 [million] or 395 [million], it's a big market, and Windows 8 will propel that volume.

It also brings us into this world of much more mobile computing and more mobile form factors. I think it's going to be hard to tell what's a tablet and what is a PC.

Ballmer also flirted with setting a price for Surface, which is widely compared to Apple's iPad, but came up short. From the interview:

Q: The iPad has the largest share of the tablet market, but its soft spot, it seems to me, is the price. With the Surface, are you planning to compete with the iPad on price or on features?

A: We haven't announced pricing. I think we have a very competitive product from the features perspective. ...

I think most people would tell you that the iPad is not a superexpensive device. ... [When] people offer cheaper, they do less. They look less good, they're chintzier, they're cheaper.

If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle [Kindle Fire, $199] to do their homework? The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it. ...

If you look at the bulk of the PC market, it would run between, say, probably $300 to about $700 or $800. That's the sweet spot.

The price is the ballpark range that people pay for an iPad but without a keyboard. It's a different price bracket than that occupied by Amazon's Kindle fire, and the Surface itself has a broader set of capabilities.

Windows 8 for games

Microsoft has teamed up with the cloud-based gaming company Agawi in order to stream games to users of Windows 8 devices, the companies say.

The games would be based in Microsoft's Azure cloud and be streamed to whatever Windows 8 device the customer had -- tablet, laptop, PC.

The goal of the partnership is to make it easier for developers to create games that scale without having to worry about how that will be accomplished. That will be taken care of by the Agawi/Microsoft back end, they say.

Agawi demoed some of the games at Cloud Gaming USA this week.

Meanwhile, Microsoft also plans to open an interactive entertainment studio in London this November that will focus on using Windows 8 devices as the underlying technology.

The goal is to build a business that focuses on entertainment-as-a-service that can be sold to users of Windows 8 tablets such as the Surface devices Microsoft is making itself to best show off the new operating system.

The new studio "will allow Microsoft Studios to explore the many creative and business opportunities that developing new games and entertainment experiences on Windows 8 tablet devices and platforms will afford," says Lee Schuneman, who will head up the studio. So far the studio hasn't been named.

Free Surface tablets for Microsoft workers

Microsoft CEO Steve Ballmer promised at the annual company gathering that all 90,000 full-time Microsoft employees will get free Surface tablets, a Windows 8 PC and a Windows Phone 8 phone.

Employees get to use the tablets and phones for whatever they want, but the PCs are for work only, according to posts on Twitter.

Of course there is a top-of-line Surface model that has the processing power of a PC, so the promise of a tablet and a PC could be fulfilled with a single device.

Office preview at Windows 8 launch

When Windows 8 on ARM-based devices -- Windows RT -- launches Oct. 26, the version of Office applications bundled with it will just be preview versions, Microsoft says.

These tablet devices only run applications designed specifically for Windows 8 (Microsoft calls them modern apps) with the exception of specially crafted versions of Word, Excel, PowerPoint and OneNote.

But the final version of these Office apps won't be ready when Windows RT becomes generally available, Microsoft says in a blog.

"After the final edition of Office Home & Student 2013 RT is released in a customer's language, their Windows RT device will be automatically updated with the final edition for free via Windows Update (Wi-Fi connection required)" the blog says. "Customers can expect to get these updates starting in early November through January depending on their language. We'll publish the specific update schedule on October 26."

IE 10 patched for Windows 8 launch

Microsoft says it will patch a Flash vulnerability in the new Internet Explorer 10 that is designed specifically to better support the touch capabilities of Windows 8.

This is a decision that counters what Microsoft said earlier -- that it would wait until after the Windows 8 launch Oct. 26 to patch the browser.

The company must have decided the weakness represented a significant security threat that couldn't be ignored.

Traditionally IE supported flash via plug-ins, but they have been banned with IE 10 and Microsoft has instead built flash directly into the browser.